The latest version of Google's Android OS is 2.3 – codenamed Gingerbread – but only 1.7% of Android users have it installed on their phones, according to Google's latest statistics. 61.3% have version 2.2 (Froyo) with another 29% on 2.1 (Eclair). The debate around Android fragmentation, it's safe to say, isn't going to recede any time soon.

The pace of innovation within Google's Android division remains swift, as it pushes out new versions of its software for handset partners to use. The roadblocks come because those handset firms – and then operators separately – decide when to make those updates available to their customers. It's a far cry from the rush of iOS users to download Apple's software updates as soon as they are released, with iTunes prompting them if they don't.

Is this OS fragmentation a big problem for Android developers? It's not the only factor: they have to think about screen sizes, processors and available input mechanisms too. Increasingly, developers I talk to say a more important factor is whether they think they'll make enough money on Android to justify the development costs of dealing with this fragmentation.

Those planning an ad-supported app tend to say yes, while those with a business model based on sales have more mixed opinions. Fragmentation is a headache, but one worth dealing with if you're confident of being rewarded for your efforts.

There's another concern for Google though, and it's this: Android fragmentation might not stop developers making apps for its platform, but will it stop most of them from pushing the boat out to use the latest OS features? Playing it safe by developing with Froyo users in mind is a sensible business strategy, but it could be a brake on the kind of 'hero' apps that showcase the latest Android handsets. It's noticeable that many of Android's hero apps have been developed by Google itself, rather than external developers.

In other words, the debate around Android fragmentation should go further than 'will it stop developers from making apps?' onto 'will it stop them pushing the boat out when they do make apps?' Rapid iteration from the sharp minds within Google is one of Android's trump cards in the smartphone wars, but could Google do more to ensure developers feel comfortable keeping pace with that iteration?